Texas requires all drivers to maintain insurance on their motor vehicles. Yet, it appears many Texans do not follow this law. A new program that allows registered vehicles to be matched with insurance policies reports that 20 percent of vehicles have no insurance coverage.
The TexasSure Vehicle Insurance Verification program was created at the request of the legislature to allow law enforcement and other state agencies to have real-time information on insured vehicles in the state.
The Texas Department of Insurance (TDI) estimates drivers with insurance pay more than $1 billion in increased premiums to protect themselves from the 4.17 million uninsured drivers in Texas. This extra coverage shields insured drivers from uninsured and underinsured motorists.
Uninsured and underinsured (UM/UIM) coverage is a separate part of your insurance policy and is used to provide compensation for your injuries or damages in an auto accident when the other driver has inadequate insurance or lacks any insurance.
State Crack Down on Uninsured Drivers
TexasSure is part of a plan to reduce the number of uninsured drivers in Texas and help lower insurance costs for all drivers.
The rationale for mandating insurance for all vehicles in the state is to ensure that a driver is “financially responsible” for any damage or injuries he or she causes. Uninsured drivers may lack insurance because they could not afford it, or just failed to acquire coverage.
Texas “30/60/25” Coverage
Financial responsibility in Texas means that your policy covers the state minimums. As of August of 2011, Texas requires minimum liability coverage of $30,000 per injured person, $60,000 for everyone injured in an accident, and $25,000 for property damage. This is known as 30/60/25 coverage.
The types of expenses that your insurance can pay after an auto accident include:
- Medical and funeral costs
- Lost wages
- Pain and suffering
- Car repair or replacement costs
- Car rental expense
- Punitive damages
What if I Only Have the Minimum Coverage?
While the state law only requires you to carry the minimum amount of insurance coverage, it may be a good idea to think about how much coverage you’re really buying and how much you may need.
Consider the parts of the 30/60/25. The “30” means each person injured can only receive a maximum of $30,000, regardless of their actual medical expenses. Medical expenses could easily exceed $30,000 for an individual.
The “60” means all of the persons injured in the auto accident will receive no more than $60,000, irrespective of the total of actual expenses. Moreover, if multiple parties are injured, $60,000 might be insufficient.
The “25” means that all the property damage to cars and any of the physical surroundings is capped at $25,000. With the average price of a car over $20,000, this amount leaves you open to a lawsuit to satisfy any excess damage. At Briggle & Polan, PLLC, we see this happen all the time.
What Is UM/UIM Coverage?
Insurance companies must offer uninsured and underinsured motorist coverage. If you decline, you must do so in writing. UM/UIM may appear confusing but is relatively straightforward.
While uninsured and underinsured are frequently listed together, they are separate coverage and cover different aspects of insufficient insurance:
- Uninsured Motorist (UM) Coverage: UM coverage is used if the other driver has no coverage or is unidentified. Without this coverage, you would receive no compensation from the other driver.
- Underinsured Motorist (UIM) Coverage: UIM is used when your damages exceed the other driver’s policy coverage. If the other driver has 30/60/25 policy in Texas, and your medical expenses were $45,000, your UIM could cover the extra $15,000.
Remember, UIM only pays up to your policy limits. This is another good reason to consider having more than just the statutory minimum policy.
There are two types of UM/UIM coverage:
- Uninsured motorist bodily injury (UMBI) covers your medical expenses, loss of income, disability and other bodily injury damage.
- Uninsured motorist property damage (UMPD) covers the cost of repairs to your car, damage to personal property in your car (laptop, luggage), and a rental car.
Actual Physical Contact
Uninsured motorist coverage generally requires that you can identify the vehicle and driver that was involved in your auto accident. If you were in a hit and run accident, where the other vehicle did not stop after the accident, Texas law requires there to be “actual physical contact” in the accident.
Say a driver was approaching from the opposite direction and was weaving in-and-out of the lane. If you swerve to avoid them, run off the road, strike a guardrail and damage the side of your car, you would probably not be able to recover, as there was no actual physical contact with the other car.
The Texas legislature used this language to prevent fraud by drivers claiming a “phantom car” as the cause of their auto accidents.
Judgment Proof
Another good reason to have UM/UIM coverage on your policy is some drivers are judgment proof. While some people may have allowed policy to lapse, and so have no insurance coverage, many are in direr economic circumstances. In this time of underwater mortgages and large credit card debt, some drivers may have no assets that you could recover in a lawsuit against them.
This means that, even if they were clearly the cause of the accident (they rear-ended you at a stop sign, for example), and you could easily win a lawsuit against them in court, any judgment you receive would be worthless. And because UM/UIM pay is capped by your own policy limits, you probably want more than just the statutory minimum. If you’ve been in an accident with an uninsured motorist contact Austin auto accidents lawyers at Briggle & Polan, PLLC today for a free consultation.
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